UK Automotive Industry

Jim Cunningham Excerpts

Tuesday 1st April 2014 Westminster Hall

[Gavin Williamson]

My hon. Friend is absolutely correct. Much of our success has depended on learning from foreign businesses. They invest in the UK because they see that we have the right environment and structures to succeed.

Since 2010, £7 billion has been invested in the automotive sector, growing success and bringing jobs to the UK. My constituency of South Staffordshire has been incredibly fortunate to benefit from that investment; Jaguar Land Rover has announced a £500 million investment to build a new engine manufacturing facility on the i54 South Staffordshire site, creating 1,400 jobs directly and another 3,500 jobs across the UK in our supply chain.

[Mr Jim Cunningham (Coventry South) (Lab)]

I am sure that the hon. Gentleman recalls that one of the starting points for the turnaround of the motor car industry was when Tata took over Jaguar—before the 2010 election, by the way. I remember meeting Tata at the time, along with the trade unions.

We once tried to get Nissan to invest in Coventry airport and turn it around for car production. We did not get the grants at the time, which is why Nissan went to Sunderland instead. Nevertheless, we welcome any increase in production and manufacturing generally, but most importantly in Coventry and the midlands. The motor car is a big thing; Coventry was once known as the motor car city.

[Gavin Williamson]

The hon. Gentleman is absolutely right. Let us not forget that the west midlands are the beating heart of the automotive industry in this country. The west midlands are what drive the automotive industry and have the most to gain from an expanding automotive industry. Almost one third of those employed in the industry live and work in the west midlands. That is why many hon. Members from the west midlands are present for today’s debate. We know that it is important to our constituencies and our region to drive economic growth and success. We have to be committed, both as a Government and as constituency Members of Parliament, in order to support businesses, whether foreign or domestic, to invest.

While much has been done, there is much more to do. The hon. Member for Coventry South (Mr Cunningham) pointed to the success of Jaguar Land Rover, much of which is down to research and development and which, importantly, leads to excellent products that people want to buy.

[Gavin Williamson]

My hon. Friend is absolutely right. He is right to point out the valuable work that Perkins Engines does to supply the heavy construction sector. We are seeing a build-up of expertise in engine design and manufacture, not just in the west midlands but right across the UK. That can be seen not just in JLR’s investment in its new plant or in Perkins’s work, but in BMW, which produces many of its engines in Hams Hall, and in Ford, as a third of its cars, which are produced across the globe, have engines manufactured in the UK. That is why it is vital that the Government keep their commitment to invest in research and development, whether through the Technology Strategy Board or the regional growth fund.

I am pushing for the Government to support and commit to the regional growth fund, and I hope the Minister will reassure us on that. I seek real Government commitment to help British industry and automotive production so that the technology and research and development bases may grow and develop. It is vital that R and D is based here in the United Kingdom, because if we can get businesses to invest in R and D in the UK, they will often base their manufacturing here, too.

[Mr Jim Cunningham]

I congratulate the hon. Gentleman on securing this debate. An important driver in the west midlands, and certainly in Coventry and Warwickshire, is the university of Warwick, where a lot of research and development and business innovation take place. Many companies, including companies from Germany, are investing because of that research and development, which helps the economy not only of Coventry and Warwickshire but of the west midlands. That is vital.

[Gavin Williamson]

The hon. Gentleman is correct. The finest engine ever produced is being designed and engineered at Whitley in his constituency and will be built in my constituency by Jaguar Land Rover. Having that research and development based here in the United Kingdom is vital when businesses decide whether to invest in manufacturing in this country. Sadly, we do not have enough manufacturing, and we need more, which is why I urge the Minister to do all he can to start a dialogue with manufacturing companies, whether it is Nissan, Toyota, Honda or any of the many others, to carry out more research and development here in the UK. Some of the greatest automotive designers have come out of British design schools, and some of the best technical expertise comes out of British universities, but we have to leverage that much more.

One of the UK automotive industry’s great weaknesses is our supply chain. Although we have a very developed assembly sector, the supply chain is incredibly weak. The industry runs a trade deficit of close to £7 billion in components that have to be imported, which is not good enough. We need to make progress by encouraging businesses to invest in the UK from abroad, but we also need to strengthen our supply chain’s domestic infrastructure. We need to help small businesses to grow so that they can become medium-sized businesses. We need medium-sized businesses that are already supplying the automotive industry to grow into large businesses, and we need to support them as they take their first steps towards investing in research and development. If our automotive sector does not have a developed supply chain, it will become much more difficult for the sector to develop the new products that it needs to succeed. Let us not be so naive as to think that large automotive companies do all their product development purely by themselves; they do it hand in glove with their supply chain, working incredibly closely to ensure that the components, parts and products are in place for them to deliver new models.

[Mr Jim Cunningham]

The hon. Gentleman raises some interesting points. Talking about the supply chain—I will leave the automobile industry aside for a moment—unless companies such as Rolls-Royce get their spare parts on time, they cannot finish their engines on time, which often results in a financial penalty. That illustrates the point that it is vital that we get the supply chain right, whether we are talking about the automobile industry, manufacturing in general or companies such as Rolls-Royce.

[Gavin Williamson]

The hon. Gentleman makes another strong point. When the disaster happened in Japan, many Japanese companies that produce large numbers of automobiles here in the UK were badly hit by disruption to their supply chain. There is a real benefit, not just to the British people but to companies based here in the UK, in having more of the supply chain on our doorstep. We need to do all we can not just to encourage small and medium-sized businesses but to encourage foreign businesses to invest in the UK.

I would like the Government to consider more closely how to give foreign investors greater reassurance that, if they invest here in the UK, they will have the support they need, whether through the regional growth fund or some other mechanism. That would help the UK to attract such investment. The Government must consider how we can reassure companies that we will give them training and skills support so that they have the right work force to deliver and manufacture their goods here in the United Kingdom. Education and skills are vital to this high-tech industry. Although we are making up ground, we still lag a little behind other countries. Every automobile manufacturer always says that its area of greatest concern is whether the skills will be in place for the next generation of workers.